Monday, January 16, 2012

Week 3 Forex Analysis

2012 Week 3 Analysis
Commodity dollars Vs. USD

The Nzd dollar took the lead in this trio against the dollar it broke through the downwards trend line and is currently on its second bull fib swing with a target of 0.8300 area. This pair has been in a bullish momentum for a while and I anticipate a bigger retracement coming up shortly. It is quite possible it can rally up to 0.8100 before dropping 200/300 pips to meet lower levels of retracement on the daily. Be very careful in being bull if this pair breaks the trend line. Aud.Usd is currently between support and resistance levels it might bounce around between 1.0200 and 1.0400 area before deciding which way it wants to go. The downward trend line is also currently putting downward pressure on this pair, it can cause it to take out support and head towards 1.0000 area. Usd/Cad paints a similar picture it is currently stuck between 1.0100 and 1.0300 area. This week is going crucial for this pair to decide which way it wants to go.

Action plan: ill be monitoring these pairs carefully until they decide which way they want to go. Proceed with caution buying or selling these pairs.
Commodity dollars Vs. Jpy
Aud.Jpy, Nzd.Jpy and Cad.jpy are currently approaching resistance levels on the daily. Aud.Jpy is currently trying to break through the 80.00 level. If this pair succeed in doing so the next resistance level would be the downwards trend line around 81.50. Nzd.Jpy is making higher highs in a two step forward one step back fashion and is currently approaching major resistance levels around 61.30 and 61.65 area. We find Cad.Jpy the most interesting out of this trio only because it follows the two trend line almost religiously and is approaching the vortex just about now. The fundamentals most likely will sway this pair one way or another this week. I suspect towards the north.

Action plan: Same as above
The Australian Vs Cad/Chf/Nzd

Aud/Cad is hitting the resistance levels at 1.0500 area and by the looks of it is currently failing to break it. If this continues we can anticipate it to drop towards 1.0386 where it might bounce to retest the top of the channel or retrace a bit and continue south towards 1.0150 area. Aud.Chf is currently in a strong uptrend, im waiting for this pair to retrace 2/3 hundred pips towards the 0.9500 area of support before I buy in. Aud.Nzd had a great set up last week, we hope some of you took an advantage of it. It is currently heading further south towards the 1.2800 area where it is most likely to find some support and most likely reverse this bearish momentum.

Action plan: Short Aud/Cad if it fails to break resistance, buy Aud/Chf and Sell Aud/Nzd
The Euro against the Commodity dollars.

Nothing fancy is going on here, the commodity dollars are clearly dominating the euro. Eur.Nzd and Eur.Aud are currently in free fall with no levels of support in sight. Eur.Cad has two small support areas where we can anticipate a small retracement at 1.2766 and 1.2437. Over all this picture is very clear, ill be looking for shorts here.

Action plan: ill be looking to short all 3
The European countries Vs. Jpy
All 3 are currently in a strong downtrend no surprise here. With the euro region in trouble with the last little while it is not surprising to see the spill over effects on these countries. The bears in Chf.Jpy took out the previous low at the 80.00 mark and are currently after 76.39 low. Gbp/jpy is heading for the low at 116.90, where we might see a small bounce before it goes into free fall. Eur/Jpy is already in free fall and nothing but short opportunities here.

Action plan: ill be looking to short all 3
Eur/Gbp Eur/Chf and Gbp/Chf
Eur.Gbp has been dominated by bears for a while now; these bears are after 0.8144 and 0.8061 levels. If the bulls dont take back control the next level of any support would be 300 pips away. Eur/Chf is one scary pair to trade right now im currently staying away from it only because I fear any intervention by the SNB. Gbp/Chf is currently stuck in about 300 pip channel, there might be short or long opportunities on this pair depending on where it is in the channel, you can also trade the break outs.

Action plan: Short Eur/Gbp, dont trade Eur/Chf and proceed with caution on Gbp/Chf
Eur/Usd Gbp/Usd and Usd/Chf

The eur/usd is headed towards 1.2583 where we might see a small bounce. Depending on how this week plays out we might see this pair trade below 1.2400’s very soon. Likewise we can expect Usd/Chf to rally further north this week. It is currently trading in a choppy bullish momentum not a pretty picture to look at. Never the less this pair might present some good buying opportunities. Gbp/Usd broke out of the channel is currently heading south, it is currently retracing towards the back of the channel again. I doubt it will break through resistance at 1.5400 area. Ill be looking for short opportunity on this pair.

Action plan: Short Eur/Usd and Gbp/Usd buy Usd/Chf
Gold and silver

Both metals are sitting at support levels at this moment. If support holds Gold and Silver will attempt a second run at taking out their resistance levels. For gold this is 1660’ and silver at 30.71. If support for gold doesn’t hold around 1625 we can this metal retrace to lower support level at 1560, for silver the lower support level is at 28.05.

Action plan: buy both metals if support holds.

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